IDFC First bank is carefully crafting its strategy to become a full fledged retail bank with low cost deposits and small ticket lending

Sharp rise in tea prices, impacted Tata Consumer performance in the near term, but long term trajectory is attractive with presence in growth segments of the FMCG industry and steady value being created in JV with Starbucks
May 18, 2021
Zydus Wellness well poised to flourish with assimilation of acquired products nearly completed and management focusing on distribution and brand promotion
May 18, 2021

IDFC First Bank, formerly IDFC Bank has changed its name post merger with Capital First. The merger was highly synergistic and provided low cost funding to erstwhile Capital First’s retail lending business and diversified erstwhile IDFC Bank’s predominantly wholesale lending business with small ticket loans. However, further souring of loans of erstwhile IDFC Bank and Covid related NPA provisioning has impacted near term profit. Management had guided for completion of provisioning cycle and significantly lower credit cost going forward but the time horizon for this scenario is getting extended. In the interim, low cost deposits and CASA has grown impressively. It is for this reason that we have an over weight rating despite soft near term performance – 11-05-2021 Price: 56.10 Rating: Over Weight Recommendation: Buy

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